Monday, June 1, 2009

Ace despairs at the figures but I feel about this the way lefties felt when gas was more than four bucks a gallon and heading north: The higher the numbers go, the better. They figured only a full-blown meltdown would force a paradigm shift from fossil fuels to green energy; similarly, people like Robert Samuelson realize that only bankrupting Medicare and Social Security will make Congress face the fact that the two programs — which account for 81 percent of the debt load, per USA Today’s chart — will collapse under the weight of baby boomers. Everyone knows it, including and especially our chief creditor, so let’s get on with it.

China is the biggest foreign owner of U.S. Treasury bonds. U.S. data shows that it held $768 billion in Treasuries as of March, but some analysts believe China’s total U.S. dollar-denominated investments could be twice as high.

“Chinese assets are very safe,” Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.

His answer drew loud laughter from his student audience, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.

The $546K figure is based on current debt only, mind you. It doesn’t include universal health care or the fact that the FDIC’s going bust and will need to bailed out. According to some back-of-the-envelope math at the Atlantic, even with a hypothetical interest rate of 0 percent, each household now owes $22,274 per year … for the next 30 years. Average U.S. household income as of 2007: $50,233. Won’t be long now until the reckoning. Exit question: Blame Bush? Or blame Reagan?Click to read the article and the comments